Correlation Between Hyundai and News Corp
Can any of the company-specific risk be diversified away by investing in both Hyundai and News Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hyundai and News Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and News Corp Cl, you can compare the effects of market volatilities on Hyundai and News Corp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hyundai with a short position of News Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and News Corp.
Diversification Opportunities for Hyundai and News Corp
Pay attention - limited upside
The 3 months correlation between Hyundai and News is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and News Corp Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News Corp Cl and Hyundai is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hyundai Motor are associated (or correlated) with News Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of News Corp Cl has no effect on the direction of Hyundai i.e., Hyundai and News Corp go up and down completely randomly.
Pair Corralation between Hyundai and News Corp
Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the News Corp. In addition to that, Hyundai is 1.82 times more volatile than News Corp Cl. It trades about -0.11 of its total potential returns per unit of risk. News Corp Cl is currently generating about 0.42 per unit of volatility. If you would invest 2,600 in News Corp Cl on August 25, 2024 and sell it today you would earn a total of 368.00 from holding News Corp Cl or generate 14.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. News Corp Cl
Performance |
| Timeline |
| Hyundai Motor |
| News Corp Cl |
Hyundai and News Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and News Corp
The main advantage of trading using opposite Hyundai and News Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, News Corp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in News Corp will offset losses from the drop in News Corp's long position.| Hyundai vs. Vitec Software Group | Hyundai vs. Take Two Interactive Software | Hyundai vs. Planet Fitness Cl | Hyundai vs. Optima Health plc |
| News Corp vs. Samsung Electronics Co | News Corp vs. Samsung Electronics Co | News Corp vs. Hyundai Motor | News Corp vs. Toyota Motor Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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